Goldman Sachs Boosts Web Wager With $70 Million AppSense Stake
Goldman Sachs Group Inc., following its investment in Facebook Inc., paid $70 million for a minority stake in AppSense Ltd., bolstering a bet on growth at private Internet companies.
The funding is the first outside capital AppSense has received in its 12-year history, Darron Antill, chief executive officer of the software company, said in an interview. AppSense’s technology lets users access their corporate computers remotely from laptops, tablets and smartphones.
Goldman Sachs invested $450 million in Facebook at a $50 billion valuation last month. The firm joins Morgan Stanley, T. Rowe Price Group Inc. and Tiger Global Management LLC in mimicking late-stage venture capitalists by taking stakes in Web companies before their initial public offerings. Antill said AppSense is three to four years away from an IPO.
“In terms of the financial strength and depth of Goldman, they’re unrivaled by traditional VCs,” said Antill, 44, who joined AppSense last year and was promoted to CEO in January. “The market is just taking off, and Goldman sees that.”
AppSense, based in London and New York, plans to expand from 300 employees to between 450 and 500 over the next year, Antill said. The company is investing in the Europe, Middle East and Africa region and accelerating product development, for what it expects to be a $2 billion market by 2015, according to a statement released today.
Revenue increased 60 percent to $47 million in the fiscal year ended June 2010 and is on track to rise another 60 percent this year, according to Antill.
AppSense has 4,000 customers, including the U.K.’s BT Group Plc, JPMorgan Chase & Co. and United Airlines.
“AppSense’s strong customer traction, history of innovative solutions in desktop computing and the record growth it has experienced over the past two years further solidified our decision to invest in the company,” said Pete Perrone, managing director at New York-based Goldman Sachs. Perrone is joining the AppSense board.
Zynga Inc., the biggest maker of games for Facebook, is in talks to raise funding from firms such as T. Rowe Price and Fidelity Investments at a valuation near $10 billion, two people familiar with the matter said last week. Groupon Inc., the largest daily-deal coupon site, raised $950 million at about a $4.75 billion valuation from Morgan Stanley and other backers.
In addition to expecting a return on their investments, Goldman Sachs and Morgan Stanley are vying to win mandates to handle initial share sales when the companies go public, said Ira Cohen, managing director of Signal Hill Capital, a New York- based investment bank. Both firms have held talks with Groupon about an IPO that would value the Chicago-based company at $15 billion, a person familiar with the matter said in January.
“Presumably some of these investment banks will have a good chunk of the underwriting,” Cohen said.
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